Indian Agriculture Sector: Challenges, Reforms, and the Road Ahead

• Agriculture in India is more than an economic activity — it is a way of life. 
• It employs over 45% of the Indian workforce, and contributes approximately 18.2% to the Gross Value Added (GVA) as of 2022-23, as per NSO estimates. 
• However, the sector is at a critical juncture, facing technological disruptions, climate-related challenges, and market inefficiencies.
• To make Indian agriculture future-ready, there is a pressing need for reform, innovation, and investment.

Current Scenario: Key Facts

• GVA Contribution (2024–25): 16%
• Agricultural workforce: Over 45% of India’s population
• Land holdings: 86% of farmers are small and marginal (less than 2 hectares)
• Irrigation dependence: ~51% of the net sown area is still rain-fed
• Decline in crop sub-sector: From 62.4% (2011–12) to 54.3% (2022–23)

Major Challenges in Indian Agriculture

Low Mechanization

• Only 47% of Indian agriculture is mechanized.
• In contrast, China (60%), Brazil (75%) have adopted extensive mechanization.
• Result: Low productivity, high labour dependency, and cost inefficiencies.

Inadequate Irrigation Infrastructure

• Over half of agricultural land relies on monsoons.
• Erratic rainfall due to climate change has led to frequent droughts and floods, impacting yield.

Low Investment in R&D

• India invests just 0.4% of Agricultural GDP in R&D, compared to:
• Israel: 4.3%
• China: 1.5%
• This affects the development and dissemination of new, climate-resilient technologies.

Cobweb Phenomenon & Price Volatility

• Farmers often suffer due to market mismatches.
• Overproduction → Price crash → Losses → Underproduction next season → Price hike (cycle continues)
• Reasons: Inefficient storage, weak market linkages, lack of real-time price information.

Fragmented Land Holdings

• Makes modern technology adoption and economies of scale difficult.

Limited Access to Credit

• Many small farmers rely on informal credit sources with high interest rates due to limited financial inclusion.

Government Interventions and Schemes

Seven Key Agricultural Missions (2023–24)

PM-KISAN

• ₹6,000 annual income support to small/marginal farmers through Direct Benefit Transfer (DBT).

e-NAM (National Agricultural Market)

• A unified digital platform connecting 1,000+ APMC mandis for transparent trading.

PM Fasal Bima Yojana (Crop Insurance)

• Offers affordable insurance against crop loss due to natural calamities.

JAM Trinity (Jan Dhan–Aadhaar–Mobile)

• Enhances financial inclusion, subsidy delivery, and farmer authentication.

Role of Technology: AI, Automation, and Smart Farming

• Artificial Intelligence (AI) is replacing traditional white-collar roles, even in agriculture:
• Automated crop monitoring
• Predictive weather analysis
• Drone-based pesticide spraying
• AI can improve productivity but may also reduce labour-intensive jobs, requiring re-skilling.
• Examples:
• Google’s AI tools automate code and processes — similar tools now entering AgriTech.
• FarmERP, DeHaat, CropIn – Indian agri-startups using AI and big data.

Policy Recommendations: The Way Forward